How MGAs and insurers can turn data liabilities into data assets

March 17, 2023 / 4 min read

Managing general agents (MGAs) are having a moment.

One study estimated that following years of significant growth, the total MGA market exceeded $70 billion in direct written premiums in 2021.¹

As MGAs help bring capacity, innovative technology, and underwriting expertise to niche or challenging market segments, it’s no surprise to see such dramatic growth. While the past few years have been good for MGAs (aka general agents, program managers, managing general underwriters, and others) and their insurer partners, rapid growth may also be creating significant compliance reporting, data management, and other operational challenges—and opportunities—in its wake.

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"As markets continue to evolve, the complexities of meeting the regulatory requirements to report statistical data on admitted lines of business could present significant challenges for both the MGA and the fronting carrier," says Stacey Baker, senior director of sales for Verisk. "As a statistical agent, Verisk can help address these challenges and streamline the reporting process—at scale."

From data disarray...

The average salary for an entry-level data manager in the United States is nearly $86,304, and with insurers experiencing an unprecedented talent crunch, experienced data management professionals could be difficult to find at any price.² As a result, MGAs in startup or growth mode may not always prioritize data management—processes and procedures that determine how data is generated, managed, secured, and accessed for analytic and compliance purposes.

MGAs generate significant data assets, including premium and claims data, that can be vital for both business development and regulatory compliance. Without well-designed systems and processes to capture, clean, organize, and report this data to their fronting carriers, MGAs could be putting those insurers at risk of potential audits and fines from state departments of insurance if they can’t provide detailed and quality data in a timely manner. A lack of data controls can also set off inefficient scrambles when responding to a special data call or ad hoc data requests from a carrier or regulator.

Beyond compliance concerns, disorganized data can represent opportunity lost. Without the ability to produce a granular view of your business, it can be difficult to spot strategic growth opportunities or quickly identify and triage problems.

Fronting carriers face their own data challenges from their MGA relationships. Insurers that work with multiple MGAs may receive data with limited information and in different formats. Without robust standardization and quality-control measures, it can be more time-consuming and rigorous to aggregate and organize data from different suppliers, let alone prepare it for higher-level analysis, including statistical reporting.

The net result: A dysfunctional data relationship can increase operational friction between a carrier and its MGA partners.

…To data deliverance

But data isn’t simply a risk for MGAs and their carrier partners to manage—it can be an invaluable opportunity to exploit.

By investing in a well-executed data management model, MGAs can work better with their carrier partners, providing clean, accurate data for both routine reporting and special requests. This, in turn, frees fronting carriers to invest resources away from compliance cost centers such as statistical reporting and toward profit-generating activities.

With a well-established single view of MGA data, fronting carriers can be better able to assess MGA and product performance and accelerate the onboarding of new MGAs and programs. Operational efficiency also can help fronting carriers improve their ease of doing business with MGA partners while reducing costs.

Maximize the value of your data assets

Leveraging our expertise and solutions in insurance data management and statistical reporting, Verisk’s team works closely with MGAs and carriers to help enhance or establish their data management model by:

Enhancing data management with technology and capabilities that enable reliable integration and harmonization across different systems and entities
Simplifying data reporting with solutions based on a proven, insurance-specific data model that can support robust analytics and compliance reporting
Better aligning resources to support insurers’ business needs and improve processes with dedicated data management and reporting professionals
Creating a scalable platform for future growth

MGAs can use the Verisk Data Management team’s expertise and solutions to organize and enhance their own data collection and management practices and enable them to better compete and further differentiate their business.

Verisk’s Data Management team can also assist fronting carriers by consolidating and standardizing data from multiple MGAs and ensuring uniformity and quality of data and analytics to improve the ease of doing business with their MGA partners.

The assurance of working with a trusted and experienced partner matters. Learn more about Verisk Data Management Solutions and what the team can do for you.

“Managing General Agents: Firing on all Cylinders,” Conning, 2022, < https://go.conning.com/IRTeaserPiece-IR-Web-2022-Social.html >, accessed on August 15, 2022
“Data manager salary in the U.S.” Indeed < https://www.indeed.com/career/data-manager/salaries >, accessed on January 19, 2023.